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The way insurance is supposed to work is by people pooling risk to mitigate rare or unexpected losses into predictable ones. What you characterize as profit is

The way insurance is supposed to work is by people pooling risk to mitigate rare or unexpected losses into predictable ones. What you characterize as profit is rational acts of individual actors to join a risk pool similar to theirs in cost per unit risk. Only a lunatic would agree to buy into insurance pool that charges similar premiums for wildly different known risks. You are asking people to do the insane.

thriftwy 3y ago
The whole idea of medical insurance is insane. It is OK for scheduled issues but not for covering shots to the moon. Like, I have a voluntary insurance for my children which covers periodic health checks and doctor appointments and maybe even ambulances, but it definitely does not cover surgery. That's what state medicine is for.
oktoberpaard 3y ago
That’s where regulation comes in. In my country it’s mandatory for every citizen to have a base insurance package and it’s mandatory for every insurance company to accept every individual for that same base package, regardless of preexisting conditions. The minimum contents of the base package are determined by the government, the prices and extras are up to the insurance companies to decide. Every calendar year people are allowed to switch to a different insurance company, or make changes to their add-on packages and options, forcing the companies to compete while being able to lock in their clients for a year for some predictiveness. In effect that means that everyone is insured against rare and expensive diseases, while still keeping it relatively affordable, because the pool also includes healthy individuals with extremely low risk profiles. Add-on packages don’t have to follow the same rules, but the base package makes sure that people won’t go into massive debt for being unlucky, which is in my opinion essential for a humane society, no matter how this problem is solved, whether it’s commercial like here, or public like elsewhere. If all is left to the market without regulation, those benefits are lost. Some people might call that freedom, but I disagree.
- beaeglebeached 3y ago
  More directly, yours is a wealth redistribution scheme from parents to elderly non-parents to produce healthy young people at the bottom of the pyramid mostly at their own cost so they can turn around and subsidize people who never raised up this distribution mechanism. An interesting system that is collapsing in much of Europe due to the free rider effect. Why have kids when some other schmuck will foot the bill and the output will lower my insurance premium in what becomes effectively a regressive tax.
  - imtringued 3y ago
    [flagged]
    - beaeglebeached 3y ago
      Wouldn't it be the kids taking advantage? They fall into non-parents bucket, so yes they are free riders but since they are children I'll forgive them. I don't blame children for not paying their premiums, and since society is about to farm hard on them it's almost a half hearted quid pro quo. Or do my adult premiums go down when I have kids?
      - oktoberpaard 3y ago
        Kids don't pay premiums until they're 18, or to be more precise: they're already covered by the base package of their parents.
    - thriftwy 3y ago
      > I doubt anyone in Europe is deciding to not have children based on this factor. Why so few children in most of Europe then? Of course they don't. They just know that they can have fleeting fun until 60 and then "somebody" will foot their old age bills. So why have children? At the same time, people who have children has to pay for themselves, for their children, for their parents but also for "grasshoppers" who only use their country's coffers when in need, while barely contributing anything.
fnordpiglet 3y ago
“Known” is the operative word. If you blind the insurer to risks and require them to accept everyone then the pool stays a random distribution. Allowing the insurer to cherry pick is the problem. Once you’ve blinded the insurer no one is doing the insane.

thriftwy 3y ago

The whole idea of medical insurance is insane. It is OK for scheduled issues but not for covering shots to the moon. Like, I have a voluntary insurance for my children which covers periodic health checks and doctor appointments and maybe even ambulances, but it definitely does not cover surgery. That's what state medicine is for.

oktoberpaard 3y ago

That’s where regulation comes in. In my country it’s mandatory for every citizen to have a base insurance package and it’s mandatory for every insurance company to accept every individual for that same base package, regardless of preexisting conditions. The minimum contents of the base package are determined by the government, the prices and extras are up to the insurance companies to decide. Every calendar year people are allowed to switch to a different insurance company, or make changes to their add-on packages and options, forcing the companies to compete while being able to lock in their clients for a year for some predictiveness. In effect that means that everyone is insured against rare and expensive diseases, while still keeping it relatively affordable, because the pool also includes healthy individuals with extremely low risk profiles. Add-on packages don’t have to follow the same rules, but the base package makes sure that people won’t go into massive debt for being unlucky, which is in my opinion essential for a humane society, no matter how this problem is solved, whether it’s commercial like here, or public like elsewhere. If all is left to the market without regulation, those benefits are lost. Some people might call that freedom, but I disagree.

beaeglebeached 3y ago
More directly, yours is a wealth redistribution scheme from parents to elderly non-parents to produce healthy young people at the bottom of the pyramid mostly at their own cost so they can turn around and subsidize people who never raised up this distribution mechanism. An interesting system that is collapsing in much of Europe due to the free rider effect. Why have kids when some other schmuck will foot the bill and the output will lower my insurance premium in what becomes effectively a regressive tax.
- imtringued 3y ago
  [flagged]
  - beaeglebeached 3y ago
    Wouldn't it be the kids taking advantage? They fall into non-parents bucket, so yes they are free riders but since they are children I'll forgive them. I don't blame children for not paying their premiums, and since society is about to farm hard on them it's almost a half hearted quid pro quo. Or do my adult premiums go down when I have kids?
    - oktoberpaard 3y ago
      Kids don't pay premiums until they're 18, or to be more precise: they're already covered by the base package of their parents.
  - thriftwy 3y ago
    > I doubt anyone in Europe is deciding to not have children based on this factor. Why so few children in most of Europe then? Of course they don't. They just know that they can have fleeting fun until 60 and then "somebody" will foot their old age bills. So why have children? At the same time, people who have children has to pay for themselves, for their children, for their parents but also for "grasshoppers" who only use their country's coffers when in need, while barely contributing anything.

fnordpiglet 3y ago

“Known” is the operative word. If you blind the insurer to risks and require them to accept everyone then the pool stays a random distribution. Allowing the insurer to cherry pick is the problem. Once you’ve blinded the insurer no one is doing the insane.